Zombie Apocalypse

With interest rates at subatomic levels, “zombie” companies continue to defy the laws of physics.

As discussed in ZH below, “it started in December 2017, when the IMF published a blog discussing the “Walking Debt: China’s Zombies” (a topic we first covered in October 2015 in “More Than Half Of China’s Commodity Companies Can’t Pay The Interest On Their Debt“). Slamming China’s ‘zombies’, the IMF said they “are non-viable firms that are adding to the country’s rising corporate debt problem, and are bad business. Zombie firms are highly indebted and incur persistent losses, but continue to operate with the support of local governments or soft loans by banks—adding very little value to economic prospects.”

Zombies are now 20% of US corporations – twice what IMF was worried about barely 3 years ago.

Zero Hedge: https://www.zerohedge.com/markets/covid-unleashes-undead-army-20-all-us-corporations-are-now-zombies

Bloomberg: https://www.bloomberg.com/news/articles/2020-11-17/america-s-zombie-companies-have-racked-up-1-4-trillion-of-debt?sref=6uww027M

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